Erythropoietin and its receptor, which are critical for erythropoiesis, are expressed in the nervous system. Mice that lack erythropoietin receptor have fewer neural progenitor cells and their differentiated neurons are markedly sensitive to hypoxia prior to death in utero due to severe anemia, suggesting that during development erythropoietin stimulates neural cell proliferation and prevents neuron apoptosis. We find that erythropoietin stimulates the proliferation of embryonic hippocampal neural progenitor cells, and that endogenous erythropoietin contributes to adult neural progenitor cell proliferation proliferation. To assess the role of erythropoietin during late embryogenesis and in adult brain, the erythropoietin receptor null mice were rescued with selective erythropoietin receptor expression in hematopoietic tissue but not in brain. These mice have normal hematopoiesis and erythrocyte production and survive to adulthood. Examination of neuron survival reveals increased apoptosis in embryonic brain. In the adult, a reduction in neural progenitor cell proliferation in the hippocampus and subventricular zone is also observed. Neurons lacking the erythropoietin receptor are more sensitive to hypoxia and glutamate neurotoxicity than normal neurons. These observations demonstrate that endogenous erythropoietin signaling promotes cell survival in embryonic brain and expands the pool of proliferating neural progenitor cells contributing to neurogenesis in the adult hippocampus. Therefore, erythropoietin is neuroprotective independent of insult, injury or ischemic events, functions beyond erythropoiesis, and contributes directly to brain development and maintenance.